Welcome to a brand spankin’ new trading week!
Let’s hit the ground running with a trend continuation trade on WTI oil and breakout opportunities on Ether (ETH/USD) and EUR/AUD.
Get ’em while they’re hot!
WTI Crude Oil: Daily
WTI crude oil’s uptrend isn’t lowkey with that Dragonfly Doji!
The commodity popped up the reversal candlestick last week, which is interesting enough even before we note that it happened at the 200 SMA on the daily time frame.
With WTI’s prices also finding support from the 50% Fibonacci retracement and forming a bullish divergence with Stochastic, you can bet that at least some oil bulls are looking for a trend continuation.
Momentum above the $100 psychological level could lead to a retest of the $110 zone near the 100 SMA or even the previous highs near $120.
If you’re looking for a bearish reversal, though, then you’ll want to wait until WTI breaks (and stays) below the 200 SMA. WTI hasn’t traded consistently below the 200 SMA since the SMA crossover in late 2020, so you know you’re about to see a reversal if WTI stays below the dynamic support zone!
Ether (ETH/USD): Daily
ETH/USD is trading around the $1,400 zone after finding support from the big $1,000 mark not once, not twice, but THREE times in the last few weeks.
Thing is, ETH/USD’s trip to $1,400 also meant breaking above a Triple Bottom “neckline” on the daily chart.
Is the third time the charm for Ether bulls?
Watch out for more bullish candlesticks, which could push ETH all the way up to the $2,000 levels near the 100 SMA and previous area of interest.
However, if traders pay closer attention to ETH/USD’s overbought Stochastic signals, then the pair may retest the $1,200 or even its 2022 lows near $1,000.
EUR/AUD has been riding a bumpy downtrend since the second half of 2020 when the pair broke below the 1.6500 – 1.6800 major area of interest.
EUR is currently trading closer to 1.4800, which is juuust below the 100 SMA and a trend line support on the daily chart.
Is EUR about to see another downswing in the next few days?
Note that EUR/AUD has broken below at least three bearish flag patterns since late 2020. If the trend line breakout is legit, then the pair could drop to its 1.4400 lows or even make new 2022 lows in the next weeks.
Not a fan of trading breakouts? That’s okay, you can also wait for a retest of the broken support or a bit of bearish momentum before you scale in your downtrend trades.
Just make sure that you have trading plans in case we see fakeouts and reversals instead of trend continuation!